How an advance affects your credit rating and Alternatives to credit card advances.

As with any form of a loan, an advance can affect your credit rating.  A cash advance from a credit card does not show up as a separate item on your credit report, but it can affect your creditworthiness if your credit usage exceeds 30.%

Credit utilization is the amount of debt you currently have with your revolving credit accounts (for example, cards) divided by the total amount of your revolving credit.  To maintain a good reputation with lenders, you should try to keep your credit utilization below 30%.  If a cash advance pushes your index beyond that, it can make you look riskier and more arrogant and your score will drop.

Alternatives to credit card advances

Since the cost of a loan with a credit card advance can be so high, you should first consider other options.

Friends and family: Ask if you can borrow money from a loved one.  Just make sure you have a formal loan payment agreement and stick to it.

Circle: Loan Circles is a form of a loan between friends and family.  With Loan Circles, you can borrow money with little or no interest and even increase your balance.  Mission Asset Fund, a San Francisco-based nonprofit, provides all three credit bureaus (Experian, TransUnion, and Equifax) credit groups and reports to help users improve their creditworthiness.

Debt Consolidation Loans: Debt consolidation loans consolidate your existing debt into a new loan, generally at a lower interest rate than your current debt, so you can make a monthly payment instead of multiple payments from multiple lenders.  different.  This alternative can help you have more money in your pocket each month to avoid the need for an advance.

If you are unsuccessful with any of the above options, there are two other options to consider, but they don’t offer much of an advantage over cash advances and can cost you even more expensive.

Short-term loans from online lenders: If you don’t have a credit card, you can use an online store like LendUp or RISE to get an advance that isn’t linked to a card. These are basically small short-term loans that you must repay quickly.  They are similar to payday loans but do not necessarily require a one-time repayment on payday.  Still, the cost can be very high.  For example, the LendUp site shows an example of a $ 200 advance. The financing fee is $ 35.20, so you will have to pay $ 250.94, which is an annual interest rate of 459%.  As you can see, these loans, like payday loans, should only be used in a real financial emergency when you have exhausted all other possible options.

Payday Loans – These short-term loans can meet your cash needs until you get your next paycheck but at a high cost.  Payday lenders generally charge high fees, as well as three-digit annual percentages (APR).  Paying them back can be difficult, and you may have more problems if you’re not careful.  Therefore, only consider payday loans as a last resort.